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TRANSCRIPT OF INTERVIEW WITH DAVID KOCH

SUNRISE

30 APRIL 2010

Subjects: Tobacco Excise Increase; CPRS; Child Care; Solar Panels

HOST: Prime Minister Kevin Rudd joins us this morning from Hervey Bay in Queensland. Prime
Minister, good morning to you.

Look, 65 per cent of respondents say they won't be swayed, so why put up the price by 25 per cent?
Is it just a tax grab?

PM: First of all, Kochie, what we've done is respond to the recommendations from our National
Preventative Healthcare Taskforce, because if we want better health and better hospitals for all
Australians, we've got to make sure we're dealing with one of the big causes of disease in
Australia, and that's tobacco.

Secondly, we were very clear yesterday - this won't stop everyone from smoking, but it will reduce
the number of Australians smoking, and as a result, because we are currently, as a nation, losing
about $30 billion a year through the impacts of tobacco, any reduction in the number of smokers is
going to help.

But last thing is this, and let's be very blunt about it -

HOST: - Why not just ban them?

PM: - Sorry?

HOST: Why not ban them or make them only available on prescription to long-term smokers?

PM: Look, this is the practical recommendation, Kochie, given to us by our Preventative Health
Taskforce which looked at all the factors involved. Put it together with what we've done on
packaging, put it together with the actual price factor, it does help bring down the number of
smokers.

Now, that, as I said, helps the overall cost of delivering health care in the country. But more
importantly it's really important for the health of individual Australians. So if you're watching
today and you're a smoker, please use this as an opportunity to go to the QUIT helpline, use it as
an opportunity to do that.

But, on the money, you're right, it raises cash, but that all goes to the National Hospitals Fund -
every dollar of it - to build better health and better hospitals for the future.

HOST: Alright, let's move on. You've had a big week, a big week of backflips - emissions trading
scheme, insulation program, government-funded child care centres, the internet filter. You'll need
to see a physio. What are you doing? Are you cleaning out all the skeletons ahead of the next
election so we can forget about them?

PM: You know something, Kochie? I've always had this view that it's important for governments to
serve their full term. I've said that on your program many times before. The key thing is to make
sure that we're responding the practical challenges as they arise.

You mentioned before emissions trading, for example. Of course, it's disappointing that we weren't
able to get an emissions trading scheme through the Australian parliament, but Mr Abbott
backflipped. I can't produce magical numbers in the Senate. That's just a reality. The Greens
opposed it as well, so the practical course of action is to be clear cut about our targets to bring
down greenhouse gas emissions - that hasn't changed. Clear cut about the way to do it - that's
through an emissions trading scheme. But plainly, because of these realities, we now have to have a
different pathway to get there and one which is matched with action around the world.

HOST: Alright, but instead of just doing the insulation program better, you've got rid of it. You
had big plans for government-funded child care centres - you've slashed that as well. You know,
they seem nonsensical.

PM: Let me go to the other one that you've raised, which is child care centres. We look very
carefully at what the private child care market is doing right across Australia, and what you've
seen, therefore, is a massive increase in private child care centres around the country. What we've
done is in fact -

HOST: - They're pretty expensive, though.

PM: That's true, but that's why this Government, tax reform, we increased the child care tax rebate
from 30 per cent to 50 per cent. That's a huge change - up to about $8,000 a year or just under
that in terms of what it means to working families.

But the key thing is to get the resources where they need to go. No government's perfect. The
Government I lead is not perfect. We're trying to respond practically to the challenges as they
arise and do so in a way which helps working families and pensioners and carers.

HOST: Alright, let's go to our viewer. Daniel Strand is in our Gold Coast studio. Daniel, what do
you want to put to the Prime Minister?

CALLER: Good morning, Prime Minister. Good to talk to you. We should do it more often.

PM: G'day, Daniel. How are you?

CALLER: Good. Hey, we got a very special day tomorrow because we're installing solar panels and
we've always tried to be very energy conscious, we try to reduce our carbon footprint and obviously
a little benefit with reducing our energy bill. However, a couple of weeks back I was told that
pensioners have to declare solar power as income, and, I mean, you must agree with me on this one
that it is outrageous - absolutely outrageous that they have to do that, but my question -

PM: - I need to get a few facts right, first. I need to get some facts right first about your
circumstances, but go on.

CALLER: But my question is, to you directly, is that what guarantees can you give me and thousands
of families in Australia who are trying to do the right thing so that we will not have to declare
our solar power as income?

HOST: OK, thank-you for that, Daniel. Just for people who aren't up on that, Prime Minister, what
you can do, to explain to everybody, is put solar panels on your roof and in New South Wales and
Queensland you can sell any excess capacity back into the grid and reduce your power bill, but
pensioners will have that counted as income and affect the incomes test for the pension. That does
seem stupid.

PM: Well, let's go to the essence of it, and I'll go back to Daniel himself. When you put on your
solar panels - and first of all, thank you for doing so, because that all helps bring down
greenhouse gas emissions, you're doing the right thing. Secondly, did you draw upon the
Government's rebate to do that, or did you do it off your own bat?

CALLER: No, definitely on the Government rebate.

PM: Okay, so the rebate from us would have been worth, what, about $7,000 or $8,000?

CALLER: Give or take, that's about right, and we put in probably $2,000 or $3,000.

PM: OK, so that's $7,000 or $8,000 from the taxpayer to help you put your solar panels on the roof.
By the way, you're one of about, I think, 90,000 Australian families we're helping that way at the
moment, and that's rolling out across the country.

Are you on the pension at the moment, and I'm sorry to just be very specific about it. Are you on
the aged pension or what?

CALLER: No, no, but at some point -

PM: - Okay, but your question was about pensioners?

CALLER: Well, my question was, if pensioners are hit for this -

PM: - Sorry, I'm going to the pension question. I just, I can't see you at the moment, I'm down the
barrel of a camera so I just had to ask that.

So, if you're on the aged pension right now, you need to understand that when it comes to income,
every fortnight I think you can earn an additional $140, $150

[AUDIO BREAK]

If you're a married couple, I think it's more like $240, $250 a fortnight, something like that -
don't quote me on the exact number.

Now, my understanding about what's called the feed-in tariff, that is, you put a solar panel on
your roof and you can sell a bit of electricity back into the electricity grid, look, you know,
most of those panels are designed that you perhaps feed back into the grid maybe $60, $50-$60 a
fortnight. That's my last advice when I looked at this in New South Wales. It should be, therefore,
doable without really affecting people's pension.

But, on the pension system as a whole, for years and years and years, governments of both
persuasions, it doesn't discriminate between the source of income one way or the other, but I'd be
very clear about the fact there's a big buffer above the actual aged pension rate which enables you
to get extra income anyway.

HOST: But some people could be close to earning and are going to have a cutback. It just seems
silly in a green sort of period we're in, we're encouraging solar panels, it seems not a big
revenue earner but it means a lot of difference to an individual. It just seems a bit narky.

PM: Kochie, let's look and see if there's any finetuning possible here. I mean, the social security
system that we just described, the pension system, has been around for a long time, and as you
know, as a finance advisor yourself, it counts all forms of income.

There's a buffer on top of what you currently get that you can earn by way of additional income
before your pension's affected. I think that should cover off what would be earned by selling
electricity back into the grid. But let's have a look at the detail, and particularly the case
which has just been raised by Daniel, even though he's not aged pensioner himself.

HOST: Okay, alright, Prime Minister, thank you for that. Big weekend, Henry Review on Sunday.
Looking forward to that. We'll catch up next week.

PM: We've got a few things on, Kochie. All the best from Hervey Bay - wonderful part of Australia.